How Bad Will It Get?

We expect job declines to continue to ease, since we expect that productivity gains will slow, and firms will find that they must bring in new workers to keep output growing. The extra boost provided by the hiring of Census workers should probably be enough to turn employment growth positive by March.

The unemployment rate will probably not peak until the spring of next year, at close to 11.0 percent.

The Dish's prediction: politically what will matter is not the absolute number but the direction. If they're going down, the Dems can breathe more easily (but not by much); if they plateau for a long time, things are going to get rough for whoever is an incumbent in any race near and far. But remember that Thatcher and Reagan were re-elected despite increasing unemployment quite dramatically in their first term. Because they had a strategy and were able to explain it.

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